Axelrod Assails U.S. Chamber, Calling Secret Donations Threat to Democracy

White House senior adviser David Axelrod said secret donations to outside political groups are “a threat to our democracy,” singling out the U.S. Chamber of Commerce for criticism less than a month before elections that will determine control of Congress.

“If the Chamber opens up its books and says ‘here’s where our political money’s coming from,’” Axelrod said on CBS’s “Face the Nation” program, “then we’ll know. But until they do that, all we have is their assertion.”

President Barack Obama and fellow Democrats have spent weeks criticizing Republican-leaning outside groups that are flooding the airwaves with tens of millions of dollars of political ads. A new ad from the Democratic National Committee says the Chamber may be taking “secret foreign money to influence our elections,” a charge the business group denies.

“This is pure partisan posturing,” said David Primo, a political science professor at the University of Rochester in New York. “The Democrats are on the defensive and think the Chamber is an easy target. I don’t think it will resonate with voters, who are more concerned with the economy and runaway government spending.”

The DNC ad, a portion of which was broadcast during the “Face the Nation” program, described the Chamber as “shills” for big business who are “stealing our democracy.”

‘Ridiculous and False’

“The ad is ridiculous and false,” Tom Collamore, senior vice president of communications and strategy for the Chamber, said in an e-mail. Collamore called the ad “a blatant attempt to avoid a serious discussion of Americans’ top priority -- creating jobs and growing the economy.”

The Chamber, the nation’s largest business-lobbying group, has pledged to spend $75 million backing pro-business candidates in the Nov. 2 elections. Just last week, it reported $1 million ad campaigns against California Senator Barbara Boxer and New Hampshire Senate candidate Paul Hodes.

The DNC ad also targets Crossroads GPS, an advocacy group advised by Republican strategist Karl Rove and former Republican National Committee Chairman Ed Gillespie. Because it’s set up as an issue-advocacy group, Crossroads GPS also doesn’t have to disclose its donors.

Rove, Gillespie

“Ed Gillespie and Karl Rove run one of them -- tens of millions of dollars from undisclosed donors, under benign names like the American Crossroads fund,” Axelrod said. “Why not simply disclose where this money is coming from?”

Neither Rove nor Gillespie is on the board or staff of Crossroads GPS or its sister group, American Crossroads, though they helped conceive of the groups and raise money for them. American Crossroads does disclose its donors.

Rove, appearing on “Fox News Sunday,” said the DNC ad accuses him and Gillespie of “a criminal violation of our law by getting foreign money and spending it on American political campaigns, and they have not one shred of evidence to back up that baseless lie.”

Rove said, “This is a desperate and I think disturbing trend by the president of the United States to tar his political adversaries with some kind of -- you know, enemies list, with being -- unrestrained by any facts or evidence whatsoever.”

Targeting Democrats

American Crossroads and Crossroads GPS together plan to spend $52 million on the elections. They have already targeted Senate Majority Leader Harry Reid in Nevada and Democratic Senate candidates Jack Conway in Kentucky and Robin Carnahan in Missouri, among other Democrats.

American Crossroads reported raising $2.6 million in August, helped by $1 million donations from two Texas businessmen, Trevor Rees-Jones and Robert Rowling, and $400,000 from insurer American Financial Group Inc. of Cincinnati. Millions of dollars in undisclosed donations are flowing into Crossroads GPS; the two groups together reported raising at least $32 million as of Sept. 20.

Gillespie, also appearing on “Face the Nation,” is chairman of the Republican State Leadership Committee, another campaign advocacy group that tries to elect Republicans and which discloses its donors. Among its biggest contributors are Indianapolis-based health insurer WellPoint Inc. and Winston- Salem, North Carolina-based tobacco company Reynolds American Inc.

Part of the impetus for forming new outside groups was to counter the weight of unions and Democratic-leaning issue groups that spent about $400 million to help Obama win in 2008, Gillespie said. Unions also don’t have to disclose most individual donations, though their money comes predominantly from members’ dues.

“We didn’t hear Mr. Axelrod or others complaining about that much of that money was undisclosed,” Gillespie said.

Republican Gap

Republicans need a net gain of 39 seats to gain a majority in the 435-member House of Representatives. The nonpartisan Cook Political Report in Washington forecasts Republicans will win at least 40 seats after the election. In the Senate, where Republicans hold 41 of 100 seats, the Cook report says they are poised to pick up from seven to nine seats.

Obama chided Republican-leaning groups on Oct. 7, without mentioning the Chamber, at a campaign rally for Maryland Governor Martin O’Malley in Bowie, Maryland, saying their advertising is funded by undisclosed contributors that may include foreign corporations.

‘Huge Sums’

“So groups that receive foreign money are spending huge sums to influence American elections, and they won’t tell you where the money for their ads comes from,” Obama said.

The Chamber denies any foreign money is being used to influence U.S. elections. The group takes in millions of dollars in dues from corporations and engages in a wide variety of lobbying activities in addition to political advertising. Critics say there’s no way to mark a clear line between foreign funds and those used for political ads.

The latest rhetoric may complicate and escalate an already tense relationship between the White House and the business community. The Bloomberg Global Poll last month found 77 percent of U.S.-based Bloomberg subscribers say Obama is too anti- business, and his favorability among the 1,408 investors worldwide is down to 49 percent from 73 percent in July 2009.

“It is a high-risk strategy,” said Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey. “The Chamber has a lot of money and influence. The voters who might be mobilized by these attacks are pretty demoralized by unemployment. He could end up energizing his opponents rather than his supporters.”

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Kristin Jensen in Washington at kjensen@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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